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2016 (11) TMI 1242 - AT - Income TaxDisallowance of loss on share transaction - Held that:- We find during the impugned assessment year the assessee has shown the purchase of share and sale of shares in the profit and loss account. As mentioned earlier, in the preceding year the shares were shown under the head “loans and advances” and not under the head “investment”. No dividend or other income was received by the assessee from Western Medical Solutions Pvt. Ltd. It is also an admitted fact that none of the Directors of the assessee company are in no way related to the Directors of Western Medical Solutions Pvt. Ltd. or M/s. Dev Constructions Pvt. Ltd. It is also noticed from the submissions made by the assessee that during A.Y. 2009-10 the assessee had claimed loss in futures and options share trading at ₹ 7,79,122/- as per page 64 of the paper book which is the profit and loss account for the year ended 31-03-2009. We find the AO in the order passed u/s.143(3) dated 15-12-2011 has accepted such loss as business loss and nothing was brought on record that any action either u/s.147 or 263 has been taken. Therefore, we find merit in the argument of the Ld. Counsel for the assessee that the loss incurred by the assessee on sale of shares cannot be treated as non-genuine loss. It has been held in various decisions that AO cannot enter into the shoes of the assessee and it is the businessman who knows better how to conduct its business. The Hon’ble Bombay High Court in the case of CIT Vs. Salitho Ores Ltd. (2010 (9) TMI 849 - Bombay High Court ) has held that an expenditure incurred for purpose of business cannot be refused on the ground that the expenditure was imprudent. The Hon’ble High Court held that when it was not the case of the revenue that the expenditure was not bonafide or that it was incurred by way of diversion of profits to a related person or a sister concern of the assessee the revenue could not have gone into the question of expediency of expenditure incurred and/or expediency of hiring of 4 dozers that was a matter of commercial expediency and the assessee was the best judge of it. It was accordingly held that the expenditure was an allowable expenditure. So far as the argument of the AO without prejudice that the loss can be allowed as a long term capital loss since buying and selling of shares is not the business of the assessee company is concerned, we have already noted from clause 19 of the memorandum of association of the assessee company that the assessee can acquire, take up and hold shares, stocks, debenture stock bonds, obligations and securities or guaranteed by any company constituted or carrying on business in India etc. etc. Since the shares are of unlisted company and have been held for less than 36 months, therefore, it is not a capital asset. In view of the above discussion, we are of the considered opinion that the CIT(A) was not justified in disallowing the claim of business loss - Decided in favour of assessee. Revaluation of stock of land at Hyderabad at net realizable value rejected - Held that:- Additional documents were not produced before the AO and the CIT(A) and since these documents go to the root of the matter, we admit the same. Considering the totality of the facts of the case, we are of the considered opinion that the matter requires a revisit to the file of the AO in view of the above additional evidences. The AO shall decide the issue afresh
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